Uncertainty caused by the terror attacks in the US is expected to depress the UK housing market.

A survey has suggested that demand for residential property could drop by one quarter over the next three months.

This is the first time in a year that our on-going research has pointed to a significant decline in homebuyer confidence in the coming months

Geoff Mozley, Alliance & Leicester

Two surveys by the Alliance & Leicester (A&L) bank found that concerns over the economic slowdown, which have already depressed share prices, are causing a dramatic slump in homeowner confidence.

Within the space of a week, A&L found that the proportion of people intending to move house within the next year fell from 7% to 5%.

In London, the number of prospective home-movers almost halved, from 12% to 7%.

A&L said that it was the first time in a year that its research had indicated a significant decrease of confidence in the housing market.

Homebuyers concern

Those most likely to put off plans to buy a home were people in their thirties.

Homebuyers' confidence dives

East Midlands: 12% to 3%

West Midlands: 13% to 5%

North West: 9% to 4%

South East: 7% to 4%

At the beginning of September, 11% of this age group planned to move home in the next 12 months.

By 16 September, this proportion had fallen to 7%.

Overall, home buying confidence had been fairly consistent in the year before the attacks, maintaining a rate of just under 10%.

However, A&L found that now only one in 20 people surveyed wanted to move.

Geoff Mozley, A&L's marketing manager of mortgages and insurance, said: "This is the first time in a year that our ongoing research has pointed to a significant decline in homebuyer confidence in the coming months."

The bank's second survey was carried out 24 hours after the terror attacks - and the results may have been partly fuelled by a knee jerk reaction.

It is too early to say whether this is a knee jerk reaction or what the true impact may be on house prices in the autumn months," Mr Mozley said.